Senate MCO tax loss proposal not what county hoped for

By Sarah Hawley -

COLUMBUS — A proposed resolution for the Medicaid Managed Care Organization (MCO) sales tax loss is not what local officials had been hoping for.

According to a weekly Statehouse Report dated Sept. 22 from the County Commissioners Association of Ohio (CCAO), the State Senate presented a proposal for the CCAO, transit authorities and the John Kasich administration to address the local MCO sales tax revenue loss, which the association felt it had no choice but to accept.

The new proposal would pay a total of $50 million additional split among Ohio’s 88 counties and eight transit authorities in January 2018, with a potential of up to $30 million to be paid in November 2018, if the state general revenue tax receipts perform better than the estimates from July 1, 2017 through Oct. 31, 2018.

These funds would be distributed based on an approach determined by the entities in cooperation with the Senate, according to the report. No estimates have been released on what the exact revenue to the counties and transit authorities would be.

“Furious” was a word Commissioner Randy Smith used to describe the reaction of himself and fellow commissioners upon learning of the proposal.

While the Senate, Kasich administration and others, including the County Commissioner’s Association, were to spend the past weeks negotiating toward a solution, Smith explained that it does not appear that that had happened.

Smith said he received a call on Friday evening from the CCAO stating that they had received a letter from Senate President Larry Obhof notifying the organization of the $50 million proposal as what Smith described as a “take it or leave it” officer.

“The Kasich administration along with CCAo and the transit authorities were given until close of business Friday (Sept. 22) to accept or reject the Senate proposal, with no opportunity to negotiate alternative provisions. In addition, CCAO was told that if the Association did not accept the proposal, the Senate may not look favorably on taking up the override of the Governor’s veto on requiring the Administration to talk to CMS,” the Statehouse Report reads.

“Obviously, CCAO is disappointed with the low dollar figure in the Senate proposal. Given the confines of what was presented, CCAO as well as the transits and the Kasich Administration said ‘yes,’” the report states.

Smith said that they had been expecting negotiations to take place on the matter, with offers going back and forth between those involved, but that does not seem to be how things worked.

Reaching out to Senator Frank Hoagland’s office on Tuesday, Smith said he is expecting to hear back from the Senator regarding his position on the matter either Tuesday evening or Wednesday morning following a Republican caucus meeting to take place on Tuesday evening.

The Sentinel contacted Hoagland’s office on Tuesday afternoon regarding the proposal and received the following statement.

“I’m pleased that both sides have worked together in good faith. This is still a work in progress, but getting funding for our critical transportation services is better than getting nothing from the federal government,” said Senator Frank Hoagland in the email.

While Hoagland’s statement appears optimistic, the reaction of the Meigs County Commissioners to the proposal was far less pleased.

Smith questioned why the Senate could not move forward with the override of the Kasich veto (at the House did) which would require the administration to reach out to the Center for Medicaid and Medicare Services to renegotiate a waiver which the state previously received to restore its funding. Then, if the request was to be denied, move forward with the new proposal.

“There is no harm in asking for the waiver to be modified,” said Smith, noting that the CCAO had hired an Obama administration Medicaid appointee to serve as their expert on the matter to assist in working on the restoration of the funding.

“The loss of the MCO sales tax revenue stream to counties and transits is a serious matter, and one that the Association has prioritized. We have been steadfast in our advocacy efforts to be treated with parity by the state, and while the Senate proposal includes some ‘real money’ in the confines of the state’s existing biennial budget, we recognize that the counties have long term needs with the loss of a $207 million annual revenue system,” the report states.

Already included in the State Budget is a total of $207 million in transitional aid for the counties and transit authorities which is to be paid in two payments in November 2017 and January 2018. The payouts are based on the tax loss to the counties and transit authorities.

Meigs County, which is to lose around $574,000 annually under the tax loss, stands to receive around $3.4 million as a lump sum payment from the original $207 million. While that may seem like a good deal for the local counties, it has been described as a temporary solution to a long-term problem, as there is no long-term replacement for the funds. In losing around 21.7 percent of its annual sales tax revenue, Meigs County stands to loss around 10 percent of its total annual operating budget.

In Gallia County, the annual loss figure is around $592,000, a 12 percent sales tax loss.

By Sarah Hawley

Sarah Hawley is the managing editor of The Daily Sentinel.

Sarah Hawley is the managing editor of The Daily Sentinel.